[Federal Register Volume 61, Number 244 (Wednesday, December 18, 1996)]
[Rules and Regulations]
[Pages 66613-66616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31991]


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DEPARTMENT OF TRANSPORTATION
46 CFR Part 125

[CGD 96-058]
RIN 2115-AF35


Offshore Supply Vessels; Alternate Tonnage

AGENCY: Coast Guard, DOT.

ACTION: Final rule; interpretation.

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SUMMARY: The Coast Guard is establishing an alternate maximum size 
limit for offshore supply vessels that is based on the measurement 
system established under the International Convention on Tonnage 
Measurement of Ships, 1996. The present maximum size limit of 500 gross 
tons is based on the U.S. regulatory measurement system. This action 
provides an alternative for owners and operators of offshore supply 
vessels that may result in the building of safer, more efficient 
vessels and may enable the U.S. designers and operators of these 
vessels to be competitive in the international market.

EFFECTIVE DATE: December 18, 1996.

FOR FURTHER INFORMATION CONTACT:
Mr. Peter Eareckson, Marine Safety Center, (202) 366-6441.

SUPPLEMENTARY INFORMATION:

Regulatory Information

    This rule is issued as an interpretative rule as authorized by 
section 702 of the Coast Guard Authorization Act of 1996 (the Act) 
(Pub. L. 104-324; October 19, 1996). The Conference Report on the Act 
(H. Rept. 104-854) states that,

[[Page 66614]]

because this rule is considered to be an interpretive rule under the 
Administrative Procedure Act (5 U.S.C. 551 et seq.), the notice of 
proposed rulemaking and comment requirements and the 30 day delay of 
effective date under 5 U.S.C. 553 would not be required in order to 
expedite this rulemaking. Therefore, this rule is being made effective 
on the date of publication in the Federal Register.

Scope of This Rulemaking

    It is the intent of the Coast Guard, in this interpretive rule, to 
implement sections 702 and 709(3) of the Act which authorize the 
Secretary of Transportation (Coast Guard) to prescribe an alternate 
tonnage for offshore supply vessels. Section 702 of the Act amends 46 
U.S.C. 14104 to provide the Coast Guard with discretionary authority to 
prescribe an alternate tonnage for a statute if that statute 
specifically states that an alternate tonnage may be prescribed under 
section 14104. Section 709(3) of the Act amends 46 U.S.C. 2101(19) to 
define an offshore supply vessel as a motor vessel of more than 15 
gross tons but less than 500 gross tons as measured under 46 U.S.C. 
14502 (regulatory measurement), or an alternate tonnage under 46 U.S.C. 
14302 (convention measurement) as prescribed by the Secretary (Coast 
Guard) under section 14104, that regularly carries goods, supplies, 
individuals in addition to the crew, or equipment in support of 
exploration, exploitation, or production of offshore mineral or energy 
resources. The scope of this rulemaking is limited to prescribing an 
alternate tonnage threshold based on convention measurement to the 
maximum size limit of 500 gross tons (regulatory measurement) specified 
in the definition of ``offshore supply vessel'' in 46 U.S.C. 2101(19). 
To establish this alternate tonnage, this rule amends the definition of 
``offshore supply vessel'' or ``OSV'' in 46 CFR chapter I, subchapter 
L, entitled ``Offshore Supply Vessels.''
    The Coast Guard recognizes that future rulemaking will be required 
to address other tonnage thresholds that apply to an OSV, such as the 
200 gross ton threshold established under 46 U.S.C. 8301 that sets the 
standard for when an OSV is required to have a licensed engineer. In 
establishing alternate tonnage thresholds for this and other 
parameters, the Coast Guard intends to solicit comments from the public 
through notices in the Federal Register. Also, the Coast Guard intends 
to use this approach in establishing alternate tonnage thresholds 
applicable to other vessel-types as well. However, it is important to 
note that the Coast Guard has the authority to establish alternate 
tonnage thresholds only for those statutory provisions authorized by 
the Congress. At the present time, authorization has been granted only 
for those statutes listed in sections 702 through 744 of the Act.

Background

    Tonnage is the principal parameter used in the shipping statutes to 
authorize Coast Guard regulations of a vessel according to its size. 
Also, tonnage has been used for a variety of other purposes including 
the assessment of taxes and fees. The traditional system used in the 
United States for measuring a vessel to determine its tonnage is called 
the regulatory measurement system and is authorized under 46 U.S.C. 
chapter 145. It consists of the standard, dual, and simplified 
measurement systems and is implemented under 46 CFR part 69, subparts 
C, D, and E, respectively. The regulatory measurement system, with the 
exception of the simplified system used primarily for smaller vessels, 
provides for a complex series of internal measurements and exemptions 
to arrive at gross tonnage. Over time, this system has become 
increasingly susceptible to manipulation because the system allows 
vessel designers to use features, such as excessive framing and tonnage 
openings, solely to reduce the gross tonnage of the vessel 
artificially. In this manner, increasingly larger vessels can be 
designed to fall within the tonnage bounds of their class. In most 
cases, these design features have a negative impact on the cost, 
efficiency, and international competitiveness of vessels. These 
features can also adversely affect safety performance.
    In response to this problem, the United States ratified the 
International Convention on Tonnage Measurement of Ships, 1969, which 
establishes a worldwide system of measurement that provides a genuine 
representation of a vessels's size. Convention measurement is 
authorized under 46 U.S.C. chapter 143 and is implemented in 46 CFR 
part 69, subpart B. Under the convention measurement system, gross 
tonnage is based on a logarithmic function of the total enclosed volume 
of the vessel and is not subject to manipulation by the use of tonnage 
reduction techniques. Because of the differences between regulatory 
measurement and convention measurement, the tonnage for a single vessel 
could differ substantially (e.g., by thousands of tons for a 200 foot 
vessel). Because convention measurement does not allow for artificial 
tonnage reduction techniques, vessels measured using this system often 
are greater in tonnage than vessels measured using regulatory 
measurement.
    The Act authorizes the Coast Guard to establish tonnages based on 
the convention measurement system as an alternative to tonnages based 
on the regulatory measurement system when a particular statute 
specifically provides that authority. With oil and gas production 
moving farther offshore and the average age of the present OSV fleet 
approaching 20 years, a market for technologically advanced vessels has 
evolved. With this in mind and to discourage the continued use of 
tonnage reduction techniques on these vessels, the Coast Guard has 
decided to make the alternate tonnage threshold for offshore supply 
vessels a priority. In the interest of expediency and recognizing that 
new construction in many cases can not effectively begin until an 
alternate tonnage is established for the maximum size of an OSV, the 
Coast Guard is establishing only the maximum size parameter in the 
definition of an OSV in 46 U.S.C. 2101(19) in this rule.

Major Factors Considered in Determining Alternate Tonnage

    In determining an alternate tonnage parameter for the maximum size 
of an OSV under the convention measurement system, the Coast Guard took 
into consideration the following:
    (1) The largest U.S.-flag offshore supply vessels in service today 
measure approximately 2,000 gross tons under the convention measurement 
system. However, there is no theoretical upper limit to the physical 
size that an OSV could be if tonnage reduction techniques are employed 
to keep its regulatory tonnage below the stuatory maximum of 500 gross 
tons for an OSV.
    (2) Technological advances in recent years have enabled the 
recovery of oil resources in increasingly deeper water. As a result of 
increased deep water operations, there has become a greater need for 
vessels with more capabilities and cargo-carrying capacities than those 
in service today. Selection of an alternate tonnage in excess of 2,000 
gross tons gives industry the flexibility to build these new vessels 
without having to employee tonnage reduction techniques and to meet the 
needs of the offshore oil and gas exploration and production 
industries.
    (3) Under Resolution A.469(XII), the International Maritime 
Organization (IMO) adopted guidelines entitled, ``Guidelines for the 
Design and Construction of Offshore Supply Vessels.'' These TWO 
guidelines apply to vessels that are less than 100 meters in length, 
corresponding to a size of

[[Page 66615]]

approximately 6,000 gross tons, as measured under the convention 
measurement system, for an OSV of modern design. A number of offshore 
supply vessels approaching this size have been built under foreign flag 
or are on order in foreign shipyards. In authorizing the establishment 
of alternate tonnages for vessels under the convection measurement 
system, Congress indicated in the Conference Committee report that 
alternate tonnages enable U.S. vessel designers and operators to be 
more competitive in the international market.
    (4) The safety record for the U.S. OSV fleet has been satisfactory. 
Further, there is no evidence to suggest that an increase of size would 
decrease the safety performance of these vessels. Under the convention 
measurement system these factors support the selection of an alternate 
tonnage threshold in excess of the highest tonnage assigned to the 
largest U.S.-flag OSV in service today.

Conclusion

    Based on the factors considered and a comprehensive review of 
existing design and operating standards applicable to an OSV, the Coast 
Guard concluded that it is acceptable and appropriate to apply existing 
OSV regulations to vessels as large as 6,000 gross tons as measured 
under the convention measurement system. This figure corresponds to the 
100-meter maximum length for vessels constructed to the latest 
international standards. An upper size limit of 6,000 gross tons will 
provide the OSV industry with the flexibility to build and operate 
vessels that are competitive with foreign-flag vessels built and 
operated under international standards. Therefore, the Coast Guard has 
determined that the appropriate alternate tonnage for the maximum size 
limit for an OSV is 6,000 gross tons for vessels measured under the 
convention measurement system. This rule amends the definition of OSV 
in 46 CFR 125.160, which contains definitions applicable to the Coast 
Guard's general OSV regulations in 46 CFR chapter I, subchapter L.
    With the promulgation of this regulation and the need for the OSV 
fleet to accommodate operations in deeper waters, the Coast Guard will 
monitor closely all aspects of the design, construction, and operating 
performance of vessels built after promulgation of this rule. Under 46 
U.S.C. 3306, the Coast Guard may consider additional standards for 
these vessels if deemed necessary due to the promulgation of this 
regulation. Any rulemaking to establish additional standards will 
provide an opportunity for public comment.

Effect on Alternate Tonnage on International Agreements

    The establishment of a 6,000 gross ton alternate threshold in the 
definition of an OSV will not affect international requirements 
applicable to these vessels. For example, any U.S.-flag OSV with a keel 
laid after July 18, 1994, that engage on a foreign voyage must comply 
with international convention requirements based on the vessel's gross 
tonnage as assigned under the convention measurement system. These 
conventions include the International Convention for the Safety of Life 
at Sea (SOLAS), International Convention on Standards of Training, 
Certification, and Watchkeeping for Seafarers (STCW), and the 
International Convention for the Prevention of Pollution from Ships 
(MARPOL).

Licensing Considerations

    Under the 1995 amendments to STCW, tonnage thresholds were adjusted 
upwards to reflect the higher gross tonnages that have been assigned to 
many vessels measured under the convention measurement system. A 
rulemaking to implement the new STCW requirements is currently being 
developed (Coast Guard docket CGD 95-062). The Coast Guard will 
address, in CGD 95-062, licensing requirements for personal serving 
threshold as measured under the convention measurement system.

Regulatory Evaluation

    This rule is not a significant regulatory action under section 3(f) 
of Executive Order 12866 and does not require an assessment of 
potential costs and benefits under section 6(a)(3) of that order. It 
has not been reviewed by the Office of Management and Budget under that 
order. It is not significant under the regulatory policies and 
procedures of the Department of Transportation (DOT) (44 FR 11040); 
February 26, 1979). The Coast Guard expects the economic impact of this 
rule to be so minimal that a full Regulatory Evaluation under paragraph 
10e of the regulatory policies and procedures of DOT is unnecessary.
    The objective of this rulemaking is to provide a definition of an 
OSV using an alternate tonnage threshold for vessels measured under the 
convention measurement system. This rule imposes no new regulatory 
burdens and may provide benefits for owners of an OSV built in the 
future. By designing a vessel under the convention measurement system, 
a vessel can be built with reduced cost and steelweight, with greater 
cargo-carrying capacity, and with improved structural safety.

Small Entities

    Under the Act, this rule is considered an interpretive rule and is 
not subject to the requirement under 5 U.S.C. 553(b) for publication of 
a general notice of proposed rulemaking. Therefore, under 5 U.S.C. 601, 
it is not a rule that is subject to the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.). Nevertheless, this rule will effect primarily OSV 
owners, which, because of the high cost of the vessels, tend to be 
larger corporations. Smaller entities associated with the design and 
construction of these vessels may benefit from the potential increase 
in construction orders for new vessels. This increase is anticipated 
due to the improved competitiveness of these vessels in the 
international market provided by the establishment of an alternate 
tonnage threshold under the convention measurement system.

Collection of Information

    This rule contains no collection-of-information requirements under 
the Paperwork Reduction Act (14 U.S.C. 3501 et seq.).

Federalism

    The Coast Guard has analyzed this rule under the principles and 
criteria contained in Executive Order 12612 and has determined that 
this rule does not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment.

Environment

    The Coast Guard considered the environmental impact of this rule 
and concluded that, under paragraph 2.B.2.e(34)(a) of Commandant 
Instruction M16475.1B, this rule is categorically excluded from further 
environmental documentation. This rule establishes a maximum tonnage 
threshold for offshore supply vessels measured under the convention 
measurement system. This rule is editorial or procedural in nature and 
interprets existing law. It has no effect on the environment. A 
``Categorical Exclusion Determination'' is available for inspection or 
copying at the office of the Executive Secretary, Marine Safety Council 
(G-LRA/3406), U.S. Coast Guard Headquarters, 2100 Second Street SW., 
room 3406, Washington, DC 20593-0001, between 9:30 a.m. and 2 p.m., 
Monday through Friday, except Federal holidays. The telephone number is 
(202) 267-1477.

[[Page 66616]]

List of Subjects in 46 CFR Part 125

    Administrative practice and procedures, Authority delegation, 
Hazardous materials transportation, Marine Safety, Offshore supply 
vessels, Oil and gas exploration, Vessels.

    For the reasons set out in the preamble, the Coast Guard amends 46 
CFR part 125 as follows:

PART 125--GENERAL

    1. The authority citation for part 125 is revised to read as 
follows:

    Authority: 46 U.S.C. 2103, 3306, 3307, 14104; 49 U.S.C. App. 
1804; 49 CFR 1.46.

    2. In Sec. 125.160, in the definition of Offshore supply vessel or 
OSV, the introductory text is republished and paragraph (3) is revised 
to read as follows:


Sec. 125.160  Definition.

* * * * *
    Offshore supply vessel or OSV means a vessel that--
* * * * *
    (3) Is more than 15 but less than 500 gross tons (as measured under 
the Standard, Dual, or Simplified Measurement System under part 69, 
subpart C, D, or E of this chapter) or less than 6,000 gross tons (as 
measured under the Convention Measurement System under part 69, subpart 
B of this chapter); and
* * * * *
    Dated: November 15, 1996
J. C. Card,
Rear Admiral, U.S. Coast Guard, Chief, Marine Safety and Environmental 
Protection.
[FR Doc. 96-31991 Filed 12-17-96; 8:45 am]
BILLING CODE 4910-14-M